July (pdf) - New York Power Authority

(a) Industrial Power Programs
The 2005 Act amended numerous provisions of the Act and the EDL to authorize the
Authority to purchase power in the marketplace and to use certain other Authority
resources to serve economic development power programs. Among the affected programs
are the Economic Development Power program, which supplies electricity to businesses
across New York State, the High Load Factor Power program, which provides electricity to
energy-intensive manufacturers throughout New York State, and the Municipal Distribution
Agency Power program, which supplies electricity for certain municipal distribution
agencies (also known as municipal utility service agencies (‘‘MUSAs’’)) to serve businesses
in their territories. Power supplied under these programs is hereinafter referred to as
‘‘Industrial Power.’’
(b) Replacement Power
The 2005 Act creates a state law basis for continuation of the ‘‘Replacement Power’’
program. These provisions ensure the continued availability of low-cost hydroelectric power
from the Niagara Project to serve businesses in western New York State. Replacement
Power was established by the federal Niagara Redevelopment Act (‘‘NRA’’) in 1957 and
provided up to 445 MW of hydroelectric power to industries in the Niagara Mohawk Power
Corporation (doing business as “National Grid”) service territory within a 30-mile radius
of the Niagara Project switchyard. The federal mandate for the Replacement Power
program expired at the end of 2005. Virtually all existing Replacement Power contracts
now run through 2012. The 2005 Act treats new applications for Replacement Power
under the same criteria as apply to the Authority’s existing ‘‘Expansion Power’’ program,
established under the Act. Allocations are awarded on a competitive basis to businesses
that commit to create jobs, increase electric load, build new or expanded facilities, and have
at least 100 kilowatts (‘‘kW’’) of demand. The Expansion Power program, which provides up
to 250 MW of hydroelectric power to businesses within a 30-mile radius of the Niagara
Project was not addressed by the 2005 Act.
(c) Preservation Power
The 2005 Act also created the Preservation Power program, which allows businesses in
northern New York State to continue to be served with low-cost hydroelectric power from
the St. Lawrence-FDR Project. The Preservation Power program governs the allocation of up
to 490 MW of firm and interruptible power from the St. Lawrence-FDR Project to
industry in Jefferson, St. Lawrence and Franklin Counties. It applies the same criteria for
allocations as are applicable to Replacement Power and Expansion Power. Renewals of
existing contracts for business use of power under the Preservation Power program are
subject to the criteria in the Act, as amended by the 2005 Act.
(d) Energy Cost Savings Benefits
The 2005 Act revised the Act and the EDL to allow up to 70 MW of relinquished
Replacement Power and up to 38.6 MW of Preservation Power that might be relinquished or
withdrawn in the future to be sold by the Authority into the market and to use the net
earnings along with other funds of the Authority, as deemed feasible and advisable by the
Authority’s Trustees, for the purpose of providing Energy Cost Savings Benefits (‘‘ECS
Benefits’’) under the ECSB Program. The ECS Benefits are administered by the
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